Cost Accounting Essays (Examples)

Filter results by:


View Full Essay

Accounting Is the Basic Function

Words: 1515 Length: 5 Pages Document Type: Essay Paper #: 74934849

Yet, financial statements and managerial accounting reports can be highly effective nonetheless. Sometimes they will merely confirm what the proprietor already knows, but there are inevitably going to be times when they will reveal that the proprietor's assumptions about the nature of the business are false. Moreover, accounting can act as essentially a second opinion. The proprietor may feel one thing is true, but the numbers can reveal something different.

Overall, accounting is an essential component of any business. Sole proprietorships often make less use of accounting, in part because the law does not obligate them to engage in any more than the most rudimentary accounting. However, proprietors should not overlook the value of accounting. Accounting helps to reveal the business' past performance, but can also be used to enact organizational controls today and to help plant for more effective operations in the future. By understanding the firm's cost structure and revenue streams acutely, a sole proprietor can make the best decisions possible. Thus, accounting is an essential component of even the smallest of businesses.

Works… [Read More]

Works Cited

Marshall, David H.; McManus, Wayne W & Viele, Daniel F. (2008). Accounting - What the Numbers Mean. McGraw-Hill/Irwin, New York, 2008.
View Full Essay

Accounting History Accounting Texts Were

Words: 1149 Length: 4 Pages Document Type: Essay Paper #: 73553193

Wood was used more for recording, ink and seals were used to write accounts on top of a piece of wood. It was used mostly by everyone as it was inexpensive plus it was very easy to write on top of it. Marked stick also played many roles, also known as counting tally. But in fourteenth century, there was an argument for a decline in tallies and to increase the use of paper which was found in England. Still this was an expensive import, in a result tally remained there for many years along for efficient calculation's an abacus was used.

By 1700, few professional accountants were found in Scotland for the Italian method of book keeping. But by 1800 there were many professional accountants who were operating in the major Scottish towns as the knowledge of accounting became even more common in the business community. The notable accountants were used to write clear exposition of the Italian method of book keeping and showed many techniques as well. In 1768, work progressed even more by the source of applications and funds. Transactions on credit were curtailed as the new receipts were made and payments were made from the Royal Bank…… [Read More]


Basil Selig & Robert Henry. "Accounting History: Some British Contributions" 1994.
View Full Essay

Accounting Ratios the Financial Statements

Words: 2089 Length: 5 Pages Document Type: Essay Paper #: 78170223

An unaware analyst may think the second company to be better but in reality its low encouraging level is due to the fact that it is unable to secure additional funding. The companies may possess different capital structures and to attempt comparison of performance when one is all equity financed and another is a geared company may not suffice for a good analysis. The chosen application of government incentives to several companies may also twist the inter-company evaluation. There may be the possibility of providing a company with the tax holiday while the other within the same line of business not, and evaluation of such two enterprises may be misleading. (Session 15: Limitation of Ratio Analysis)

As a matter of principle, the accounting strategies are required to be applied persistently. Changes are required to be emphasized and the influence of variations from an original policy revealed. This is applicable when calculating and interpreting ratios. The progress in the performance of the company cannot be found out if the published accounting figures are manipulated so as to generate favorable results. However, the benchmark comparisons against other companies in a sector may be problematic taking into consideration the flexible opportunity provided by…… [Read More]


Accounting and decision making - Ratio analysis. Retrieved from Accessed on 22 April, 2005

Basic Financial Statement Analysis: Objective 3: Explain the limitations of ratio analysis. Retrieved from Accessed on 22 April, 2005

Cars, Andreas. 2002. The Dynamic Current Ratio. 3 September. Retrieved from  Accessed on 22 April, 2005

Covers Information from Accounting 200 and 201. Retrieved from Accessed on 22 April, 2005
View Full Essay

Accounting Differential Cost Differential Cost Strategy When

Words: 1151 Length: 4 Pages Document Type: Essay Paper #: 19421400


Differential Cost

Differential Cost strategy when used by an educational entity such as UOS means that the institution determines what it would cost to offer alternative forms of education based on the number of students interested in choosing those alternative forms. In other words, by offering choices to the students based on the student's specific needs and desires and then measuring the difference in cost when compared to other educational offerings, the school will know exactly what the differential cost is. This allows the school to offer courses and activities in the most efficient and effective manner, and in a manner that produces the highest amount of revenue with the lowest cost. By knowing the difference between the school's offerings and what the same type of offerings are being offered by their competitors, the school will be capable of offering more for less. As an example, if the school decided to offer a computer course that drew 40 students paying $500 with a cost of $2,000 compared to offering a English course that drew 50 students paying $500 with a cost of $2,000 the differential cost is a positive $5,000 for the English class. The school would then know…… [Read More]

View Full Essay

Costing the Analysis Is Based

Words: 2854 Length: 10 Pages Document Type: Essay Paper #: 67582377

Dibsa should turn towards the market-based pricing strategy, which sees the implementation of competitive prices for the 3-in-1 Lawnmower. The selection of this combination of strategies would generate several impacts upon the company, but most of them would be obvious at product lifecycle level. In this order of ideas:

The sales revenues would be significantly high throughout the first six months and they would allow the company to cover for the large costs incurred in the manufacturing of the product as well as register profits; they would however decrease with the implementation of the market pricing strategy and the 3-in-1 Lawnmower would metamorphose from a star product into a cash cow

The costs incurred in the manufacturing of the new lawnmower have already begun to decrease and will continue to do so; the actual impact of the pricing strategy is limited, with the specification however that these costs will not be allowed to increase over an imposed limit, pegged to the retail price and the expected sales

Profits would be increased throughout the first six months, but will then decrease; the lower profits will however be more sustainable in the future as they will be based on a solid product…… [Read More]


Berman, K., Knight, J., Case, J., 2006, Financial Intelligence: A Manager's Guide to Knowing what the Numbers Really Mean, Harvard Business Press

Bolander, S.F., Gooding, C.W., Mister, W.G., 1999, Transfer Pricing Strategies and Lot Sizing Decisions, Journal of Managerial Issues, Vol. 11

Drudy, C., 2004, Management and Cost Accounting, 6th Edition, Cengage Learning EMEA

Goetz, Jr., J.F., 1985, the Pricing Decision: A Service Industry's Experience, Journal of Small Business Management, Vol. 23
View Full Essay

Costing Process V Job Costing

Words: 649 Length: 2 Pages Document Type: Essay Paper #: 42204177

Another example of pure job costing is web development, where the processes themselves vary hugely from project to project, meaning the cost and time involved also varies.


Dosch & Wilson (2010) do seem to do a good job of defining job and process costing, and the person who posted this seems to have understood these definitions fairly well in the abstract -- that is, the definitions provided seem reasonable and the application of these definitions to businesses chosen by the poster are explained in a way that clearly links them to these definition. At the same, the poster seems to have had some trouble accurately identifying companies where job costing might be employed, despite grasping the abstract technicalities of the definition of job costing. While it is likely that an individual laborer might be able to identify that they worked on a particular section of an airplane or wall of a mobile home, thus tying labor to specific products and making job costing seem a likely choice, it is also highly likely that these laborers repeat exactly the same tasks day in and day out, and that over the course of a year they manufacture many of the exact…… [Read More]


Chan, Y. (1993). Improving hospital cost accounting with activity-based costing. Health care management review 18(1).

Dosch, J., & Wilson, J. (2010). Process Costing and Management Accounting in Today's

Business Environment. Strategic Finance, 92(2), 37-43. Retrieved from EBSCOhost.
View Full Essay

Accounting for Decision-Making

Words: 2947 Length: 10 Pages Document Type: Essay Paper #: 40031651

Accounting for Decision Making

Shelter Partnership's Case Study

Purposes of Cost Information

The intended purpose of cost information is to provide a basis for determining the expenses and revenues associated with a particular activity (or cost object). Generally, cost and income is measured in order to determine net income or profit margins. However, as Shelter Partnerships is a non-profit, the cost information forms a basis for the allocation of resources and to assist with decisions about scaling. The cost information of Shelter Partnerships can also be used to address any cycles in the stream of donations and contributions that can impact the overall ability of the non-profit to meet its mission. In addition, since Shelter Partnership regularly applies for grant funding, it is essential that their accounting system be readily interpretable to grant reviewing bodies. Fund development cannot be sustained for long in an environment that is only loosely accountable for revenue -- in fact, this is one of the public's most common criticisms of not-for-profit organizations, and it is often their undoing (or at least that of their executive directors). Shelter Partnership must ensure that their books provide an accurate accounting of all operational expenditures and all funds received…… [Read More]

References section.

Prestige Telephone Company (2004) [Course Notes ] AIM 4343 Retrieved


Question 3.
View Full Essay

Accounting Profession Towards a More

Words: 3151 Length: 10 Pages Document Type: Essay Paper #: 57289159

However, when a shock happens that changes that pattern, the information is no longer relevant. In periods of turmoil, only the most up-to-date information is relevant. The usefulness of the information wanes quickly as the behavior of the company becomes more erratic. After a period of erratic behavior and change, the company may be forced to make internal changes that affect the way they do business. They may make changes that affect their inventory management, sales cycle, stock levels, supply chain, distribution network or other fundamental business functions. New patterns may emerge and the old information no longer applies.

The term "relevancy" can have many different meanings depending on what is happening with the company. A new accounting regime may need to be instituted when a change takes place. Looking at the most recent historical information is one way to determine the relevancy of the accounting information. The analyst needs to look for patterns and cycles, as long as the cycles appear to be consistent, the information could still e considered relevant. Another source of information to help determine the relevancy of the accounting statement is company news. One could monitor the company news to determine if there have been…… [Read More]


Cadwalader, Wickersham, & Tact LLP. 1999. Application of the Safe Harbor for Forward-

Looking Statements. Findlaw. Accessed April 23, 2009


Giroux, G. (n.d.). American Big Business and Cost Accounting. In a Short History of Accounting and Business. Accessed April 23, 2009
View Full Essay

Accounting CVP Analysis for Snap

Words: 610 Length: 2 Pages Document Type: Essay Paper #: 56411415

It is known that the membership fee is $26. Using this, the variable cost per member can be calculated, as shown in table 2.

Revenue per member (a)


Fixed costs per member (b)


Variable cost (a-b)


If the membership fee is $26 per member, the membership fee, less the fixed cost (at the break even point) will give the variable cost per member.

The information in tables 1 and 2 can be used to assess the number of membership the Snap Fitness will need to sell each month if they wish to make a profit of $10,000 per month. As seen above, it is the contribution per unit that will initially pay for the fixed costs and then the profit. To calculate the sales needed for a predetermined profit level, the required profit should be added to the fixed costs. That total may then be divided by the contribution per members to give the number of memberships that need to be sold to achieve that level of contribution (Kinney and Raiborn, 2012).

Table 2; Memberships Needed for $10,000 Profit

Fixed costs (as in table 1) (a)


Target profit (b)


Total contributions to cover fixed cost…… [Read More]


Horngren, Charles T; Foster, George; Datar, Srikant M; Rajan, Madhav, (2008), Cost Accounting: A Managerial Emphasis, Prentice Hall

Kinney, Michael R; Raiborn, Cecily a, (2012), Cost Accounting: Foundations and Evolutions, South-Western College Pub

Assuming no other fixed costs
View Full Essay

Accounting Allows Managers to Better

Words: 645 Length: 2 Pages Document Type: Essay Paper #: 50133555

d.). The methods by which this information is gathered will differ based on the type of production that is being undertaken. Cost flow assumptions relates to how costs flow through inventory accounts. This can include FIFO, LIFO, weighted average and other methods. This impacts the costs because it helps to determine which costs are counted for which period. Recording interval capability refers to the points in time when a company takes inventory. Many firms use perpetual inventory, but some firms will take inventory periodically in order to provide this information.

Overall, cost accounting systems provide the information that managers need with respect to the costs of a product. By using a specific system, wherein decisions about methodology are made about each of the five parts of the cost accounting system, the system will be consistent through different products and through different time periods for the same product. This will ensure that costs are not allocated twice, or have failed to have been allocated. It will also ensure that the costs are allocated consistently so that they can be compared. The purposes for which cost accounting is used -- keeping or cutting a product, placing production emphasis on one product over…… [Read More]

Works Cited:

Kinney, M. & Raiborn, C. (2009). Cost accounting: Foundations and evolutions. Mason, OH: Thomson Higher Education.

Martin, J. (no date). What is a cost accounting system? Management and Accounting Web. Retrieved June 23, 2010 from 

Cooper, R. & Kaplan, R. (1988). How cost accounting distorts product costs. Management Accounting. Vol. 69 (10) 20.
View Full Essay

Accounting the Most Effective Means

Words: 2730 Length: 9 Pages Document Type: Essay Paper #: 2716657

Systems of income and financial position would superimpose standards of normalization upon everyone within the firm. Accounting, thereby, had achieved Foucault's definition of knowledge as power over people per excellence. By the 1950s, however, person as decision-maker replaced this vision of person as machine, and accounting still has power in our society, but a different sort of power. Likewise, accounting still possesses its constructivism (i.e. manner of perceiving a certain stranglehold on reality by emphasizing certain construct and demoting others), although its constructivist paradigm may have differed from that of, say, a century ago. Individuals are viewed, measured, and criticized within programmatic frameworks, and Miller and O'Leary (1987) suggest that accounting today can still be viewed as part of the heritage and structure (albeit slightly changed) of the traditional mode of power that it was in the early decades of this century. In other words, the slanted domination of accounting remains.

Accounting as Form of Lens

The fact that accounting can be perceived as a subjective discipline that has its particular perspective and language is a view that is emphasized by Ezzamel, Lilley, and Wilmett (2004) who argue that accounting inscriptions serve as a certain form of hieroglyphic and semantic…… [Read More]


Armstrong, P. 2002, "Management, Image and Management Accounting. Critical Perspectives on Accounting, 13, pp. 281-295

Bryer, R. 2006, "Accounting and control of the labour process" Critical Perspectives on Accounting, 17, pp 551-598.

Chwastiak, M. & Young, J.J. 2005, "Silences in Annual Reports, Critical Perspectives on Accounting, 14, 533- 552

Ezzamel, M., Lilley, S. & Willmott, H. 2004, "Accounting representation and the road to commercial salvation." Accounting, Organizations and Society, 29, pp. 783- 813.
View Full Essay

Accounting Important Success Firm What Methods Cost

Words: 960 Length: 3 Pages Document Type: Essay Paper #: 40102732

accounting important success firm? What methods cost accounting ? The paper (a) identify main issues chosen area, (b) reference learning occurred, (c) build class activities incidents facilitated learning understanding, (d) present specific current / future applications relevance typical workplace.

Cost accounting -- definition, importance, methods

The modern day society is constantly presenting the economic agent with more numerous and more pressing challenges. In order to face them and emerge as a competitive institution, firms develop and implement a wide array of strategies, such as creating customer value, developing the skills of the staff members, establishing strategic partnerships or creating financial stability and accountability. One specific means in this endeavor is represented by cost accounting, which represents a key to organizational success. The current project focuses on the identification of the reasons as to why cost accounting is important to organizational success. A secondary research objective is that of pin pointing several methods of cost accounting and revealing the means in which they are used.

The first step in attaining the previously mentioned research objectives is that of ensuring a clear and full comprehension of the concept of cost accounting. With this objective in mind, the following lines reveal some of…… [Read More]


Pizzey, A., 1989, Cost and management accounting: an introduction for students, 3rd Edition, SAGE

2009, Cost accounting definition, Accounting for Management, last accessed on January 26, 2011

2010, Activity based accounting, Accounting Coach, last accessed on January 26, 2011

2010, Cost accounting, Investopedia,  last accessed on January 26, 2011
View Full Essay

Accounting When it Comes to

Words: 1792 Length: 6 Pages Document Type: Essay Paper #: 80183848

When it comes to standard costing, what is referred to as a standard cost is assigned the costs (actual) of manufacturing overhead, direct labor as well as direct material. In this case, these costs are not assigned to a product. It therefore follows that amounts mirroring standard costs are what become identified first in regard to the cost of goods sold as well as inventories of a given manufacturer. In this case, it can also be noted that standard costing is regarded a rather important tool of management. Incase of any variance, the top leadership of the organization immediately becomes aware of the variation between planned/standard costs and manufacturing costs.


The information provided by cost accounting is critical when it comes to the effective management of an organization. Without such information, decision making would become an equivalent of operating in the dark for most businesses. For instance, firms would be rendered clueless in the determination of whether or not to continue the production of certain products. Cost accounting makes such endeavors relatively easy and less complicated. Thus as I have already pointed out in the introductory section, when it comes to the success of any given firm, the relevance…… [Read More]


Brammertz, W., Akkizidis. L., Breymann, W., Entin, R. & Rustmann, M. (2009). Unified Financial Analysis: The Missing Links of Finance. West Sussex: John Wiley & Sons.

Drury, C. (2007). Management and Cost Accounting (7th ed.). London: Cengage Learning EMEA.

Needles, B.E., Powers, M. & Crosson, S.V. (2010). Principles of Accounting (11th ed.). Mason, OH: Cengage Learning.

Siegel, J.G. & Shim, J.K. (2000). Accounting Handbook (3rd ed.). New York: Barron's Educational Series.
View Full Essay

Accounting Systems Their Tradeoffs and Discusses the

Words: 936 Length: 2 Pages Document Type: Essay Paper #: 32923663

accounting systems, their tradeoffs, and discusses the differences between countries in their approaches.

Each of the cost accounting systems discussed in the articles accomplishes some management goals better than other systems, but there are tradeoffs involved with each. Different nations approach their cost accounting systems differently due at least in part to differences within cultures. For instance, GPK is more suited to countries where the culture is one of uncertainty avoidance, one of the five dimensions of Hofstede's taxonomy. GPK offers the most uncertainty avoidance because there is relatively little ambiguity in the assignment of costs; GPK is characterized by narrowly defined cost centers and strict cost center criteria. Cultures such as Germany's are characterized by a management environment that includes highly skilled workers and technical expertise among managers. This is in contrast to the U.S. where workers tend to have more generalist skill sets and managers have been educated to manage a broader set of responsibilities (Portz & Lere, 2010).

Firms considering adopting GPK need to factor these cultural differences into their decision process. They need to consider whether firm managers can manage effectively with a narrower job focus and limited strategic or interdepartmental decision making under GPK; they…… [Read More]

Krumwiede, Kip & Suessmair, Augustin, (2008). A closer look at German cost accounting methods: a survey of the cost management systems used by companies in Germany, Switzerland, and Austria. Management Accounting Quarterly. Retrieved July 26, 2010, from bxcra.2.a.55

Lockhart, Julie & Taylor, Audrey, (2007). Environmental considerations in product mix decisions using ABC and TOC. Management Accounting Quarterly.

Portz, K. & Lere, J.C. 2010. Cost Center Practices in Germany and the United States: Impact of Country Differences on Managerial Accounting Practices. American Journal of Business. Muncie: Spring, 2010. Vol. 25, Iss. 1; pg. 45.
View Full Essay

Using Relevant Costs to Calculate Overhead

Words: 1687 Length: 6 Pages Document Type: Essay Paper #: 82678030


This accounting report is intended to emphasize the importance of the role of a management accountant in business operational and financial decisions. The focus on two companies engaging in different lines of business with disparate concerns, questions, and issues provides a basis for the reader to understand specific instances in which a management accountant can play a pivotal role in the success of an enterprise. W. White Chemicals was perplexed about their loss of market share and a small drop in revenue. When the executives came together to discuss the problems, they each had a different opinion about the source of the problem and the possible solutions. The management accountant was able to demonstrate how a change from the traditional accounting system the company was using to an activity-based system would help the team interpret the market situation and get a handle on the actual, rather than the obfuscated, costs the company was encountering.

Mosby Design & Manufacturing faced a decision common to many companies. The enterprise needed to determine if they should continue to manufacture a particular part or if they should purchase the part directly from another vendor. The question was sufficiently complex that the company needed…… [Read More]


Fontinelle, A. (2014). What management accountants do. Investopedia. Retrieved from



View Full Essay

Accounting the Role of Financial Statements in

Words: 906 Length: 3 Pages Document Type: Essay Paper #: 39784246


The role of financial statements in investing is that they provide a consistent format that can be used by potential investors and other stakeholders to evaluate a company. There are several components that facilitate this happening. For publicly-traded firms, Generally Accepted Accounting Principles (GAAP) play a key role in the creation of financial statements. GAAP is a common set of accounting principles and procedures that companies use to compile their financial statements (Investopedia, 2012). With companies having to produce their statements according to a common set of criteria, the information is easier to compare not only between different years at the same company, but also against other firms in the industry and all other publicly-traded firms.

The IFRS is essentially the international version of GAAP. Financial statements in many countries, especially those in Europe, are produced according to IFRS. There are a many areas where GAAP and IFRS diverge, so analysts need to be aware of these differences. The process of switching from GAAP to IFRS in the United States is underway. This convergence process is one of the major issues in public accounting right now (AICPA, 2011).

The annual report is a document produced by the company for…… [Read More]

Works Cited:

AICPA. (2011). International financial reporting standards (IFRS): An AICPA backgrounder. AICPA. Retrieved March 22, 2012 from 

Beiersdorf 2011 Annual Report. Retrieved March 22, 2012 from

Investopedia (2012). Generally Accepted Accounting Principles (GAAP). Investopedia. Retrieved March 22, 2012 from

Revlon Fiscal Year 2011 Form 10-K. Retrieved March 22, 2012 from
View Full Essay

Accounting Forms the Overall Backbone of the

Words: 1922 Length: 5 Pages Document Type: Essay Paper #: 77472520

Accounting forms the overall backbone of the financial world. Financial markets are predicated on consumer and user confidence. Without confidence, consumers attempting to make financial decisions will be doing so using inaccurate and incomplete information. The lack of transparency regarding the truthfulness of reported numbers creates uncertainty within the capital markets. This uncertainty regarding the accuracy of information ultimately undermines the overall financial system, causing harm to society in the process. Investors will require higher rates of return, individuals will become unlikely to invest, and innovation could become stifled, harming the quality of life for society overall. Accounting standards, particularly those from the IFRS, are required to help maintain confidence in the reliability of reported financial performance. These standards, such as IFRS 8, are often amended to reflect the economic realities of business transactions. These changes, although well intended, may often have unintended consequence. This is particularly true for IFRS 8 Operating Segments, which has been heavily criticized by pundits and practitioners alike (Ashish, 2010).

What is the purpose of segmental information?

To begin, the intent of IFRS 8 is to ultimately create a standard for the disclosures regarding an entity's operating segments, products, and services. IFRS 8 also attempts…… [Read More]

8) Jeffers, Agatha; Mengyu Wei; Sidney Askew (2010). "The Switch from U.S. GAAP to IFRS." Proceedings of the Northeast Business & Economics Association: 48 -- 54

9) Oler, Derek K., Mitchell J. Oler, and Christopher J. Skousen. 2010. "Characterizing Accounting Research." Accounting Horizons 24 (4): 635 -- 670

10) Perks, R.W. (1993). Accounting and Society. London: Chapman & Hall. p. 16. ISBN 0-412-47330-5.
View Full Essay

Accounting Deals With Financial Transactions

Words: 740 Length: 2 Pages Document Type: Essay Paper #: 71580661

The Statement of Owners' Equity

The statement of owner's or shareholders' equity is designed to show the components of the change in equity from the end of one fiscal year to the next. Beginning with the amount of equity shown at the end of the previous fiscal year, net income is added and cash dividends paid to the owners are subtracted. If owners contributed any additional capitol this amount (such as the sale of new shares) it is added to the equity. On the other hand, if the owners withdrew capitol, equity declines. All the additions and subtractions, taken together, equal the changes in owner equity from one fiscal year to the next (Kurtz, 2010).

The Statement of Cash Flows

Public companies are required to prepare and publish a statement of cash flows. This statement provides investors and creditors with relevant information about a firm's cash receipts and cash payments for its operation, investments, and financing during an accounting period. Statements of cash flows are prepared due to the widespread use of accrual accounting, which recognized revenues and costs when they occur, not when actual cash changes hands. As a result there can be a difference between what is reported…… [Read More]


Kurtz, D.L. (2010). Contemporary Business, 13th ed. Hoboken, NJ: John Wiley & Sons Inc.

"The Four Financial Statements" (NDI). The four financial statements. QuickMBA. Retrieved July 24, 2011, from
View Full Essay

Accounting There Are a Couple of Different

Words: 489 Length: 2 Pages Document Type: Essay Paper #: 91757615


There are a couple of different issues with the Smith Company statements. The first question relates to the $45,500 worth of products. This would not be recorded as income, because the customer has not committed to the purchase. Revenue recognition rules hold that revenue cannot be recognized until the sale has been finalized (Investopedia, 2013). This revenue must be removed from the income statement. While the description of the situation is unclear, it appears that this amount was removed from the revenue already, so that the $406,000 in revenue on the income statement is the correct amount.

The next issue is the inventory problem. The inventory account is currently showing $25,000, which was the result of a physical count. There was no adjusting entry to the inventory for the $45,500 that was added to and subsequently removed from revenue. The question appears to be implying, when it should be stating clearly, that the $45,500 was removed from inventory when the sale was recorded, but was not added back to inventory when the sale was removed from revenue. Also, it is never stated whether that $45,500 was actually produced. Since the balance sheet is not the concern, the key issue…… [Read More]

Works Cited: (2013). The matching principle. Retrieved March 9, 2013 from

Investopedia. (2013). Revenue recognition. Investopedia. Retrieved March 9, 2013 from
View Full Essay

Accounting Convergence the State of

Words: 608 Length: 2 Pages Document Type: Essay Paper #: 52900563

Purpose/Perceived Value

The findings of this report will be valuable to two different audiences. The first consists of accounting regulatory bodies. These bodies are working towards convergence and are presently struggling with the resistance from the business community. Understanding the nature of that resistance is key to finding ways of overcoming it. For the large publicly traded corporations themselves, this report will help them understand why they and their peers are resistant, and this will shed light on whether or not that resistance is justified. Convergence is coming whether the corporate world is ready for it or not, but the key for corporations is to understand what convergence is, why it is important, and which elements of their resistance are not worth the effort. For both parties, it is important to work together to make the convergence process as smooth as possible, and that is going to take a greater degree of communication that has perhaps taken place thus far. This study will help to foster greater communication among the relevant stakeholders.

Works… [Read More]

Works Cited:

Qu, X. & Zhang, G. (no date). Measuring the convergence of national accounting standards with International Financial Reporting Standards: The application of fuzzy clustering analysis. Xiamen University. In possession of the author.

Larson, R. & Street, D. (2004). Convergence with IFRS in an expanding Europe: Progress and obstacles identified by large accounting firms' survey. Journal of International Accounting, Auditing and Taxation. Vol. 13 (2004) 89-119.

AICPA. (2011). International Financial Reporting Standards (IFRS): An AICPA backgrounder. American Institute of CPAs. In possession of the author

AICPA (2010). Financial system considerations in IFRS conversion projects. American Institute of CPAs. In possession of the author.
View Full Essay

Accounting Adjusting Entries Are Required

Words: 765 Length: 3 Pages Document Type: Essay Paper #: 55930731

Such adjusting entries will help to improve the accuracy of financial statements. Adjusting entries is necessary because accrual accounting systems demand that the events are recorded accurately. They are not to be recorded strictly on the basis of cash transactions, and all of these adjustments serve to translate the accounting figures that arise from the cash accounting to accrual accounting by incorporating all of the different non-cash transactions and ensuring that every element of the income statement and balance sheet is correct.

On a computerized accounting system, there might be software that can actually make these entries. If not they will need to be entered manually into the system.

As with any accounting, there are certain ethical issues that need to be understood. The accrual statements are where we report our profits and losses. It is important that they are completed accurately. Any fraud is illegal and cannot be tolerated. We have an ethical duty to all stakeholders to ensure that the financial statements that are produced accurately reflect the financial condition of the company.

There are also potential issues with the cash accounting as well. The most important is that it is relatively easy, if the numbers are adjusted,…… [Read More]

Works Cited:

No author. (2012). Adjusting entries. Accounting Retrieved November 29, 2012 from
View Full Essay

Accounting and Intrusion Detection in a Report

Words: 6872 Length: 25 Pages Document Type: Essay Paper #: 17210308

Accounting and Intrusion Detection

In a report issued by Paladin Technologies, Inc., entitled: "Security Metrics: Providing Cost Justification for Security Projects," 273 organizations were surveyed on the topic of security. The report illustrates in quantifiable terms the depth and reach of intrusion detection on the financial viability of the organization. The combined reported losses from the firms surveyed totaled $265.6 million in 1999. The highest loss categories were reported as follows:

Type of Loss

Estimated Dollar Value

Number of Respondents

Theft of intellectual capital


Financial Fraud




The average annual financial loss of firms surveyed was estimated at $40 million. Forty three percent of respondents were able to quantify financial losses, and seventy four percent were able to acknowledge financial loss. Ninety percent detected cyber attacks within the most recent twelve-month period and seventy percent reported serious breaches other than viruses, laptop theft, and employee abuse of net privileges. As for these categories, six hundred and forty three security professionals were surveyed regarding the types of attacks that they had identified or encountered. Of these, 25% identified external penetrations

27% identified denial of service attacks

85% detected computer viruses

79% detected employee abuses of Internet privileges (pornography…… [Read More]


Risk Assessment risk assessment involves estimating the likelihood and severity of an occurrence, the relative impact of risk on the facility, information handler, processing, support, and the mission of the organization. Assessing the likelihood means determining the probability that existing controls will be skirted. Pfleeger has identified a series of steps for examining the likelihood of adverse occurrences:

Calculate the probability that the risk may happen, found in the observed data for the specific system.

Estimate the likely number occurrences in a given time period. The analyst gives a rating based on several different risk analysis methodologies, and then creates a table to hold and compare the ratings.

The Delphi approach: several raters individually estimate the probable likelihood of an event, combine their estimates, and choose the best one.
View Full Essay

Accounting Maryville Online Company Trial

Words: 1030 Length: 3 Pages Document Type: Essay Paper #: 4731429

Absence of adjusting entries would most likely to either understate or overstate the accounts in the period of reporting and will have an adverse effect on the following reporting period. This is true except for bad debts or doubtful accounts and depreciation. Being in nature of an expense accounts and valuation accounts, absence of adjustments would overstate the operational performance of the business and at the same time overstate valuation of the particular asset it is supposed to reduce to its realizable value. Such absence would affect only the particular period where adjustment was omitted. To illustrate, salaries and wages of workers should be recorded as expense for the period, even if the actual payment falls on the following period. Failure to record the expense would understate salaries and wages for the year as well as understatement or omission of a liability regarding the same. The effect is an overstated operating income, specially when the object of the business is service and salaries is a direct cost of operations.

A petty cash fund is an operating cash fund used for petty or small disbursements where an issuance of check is not considered practical and convenient. Such fund is usually under…… [Read More]


Adjusting Entries (2007). Retrieved April 19, 2007, at

Trial Balance. (2007). Retrieved April 19, 2007 from

Petty Cash account (2007). Retrieved April 19, 2007 from
View Full Essay

Accounting From an Investor's Perspective What Is

Words: 1071 Length: 3 Pages Document Type: Essay Paper #: 29930782


From an investor's perspective, what is the most important information on the income statement? Why? From management's perspective, what is the most important information on the income statement? Why?

The income statement, also called the profit and loss statement is the financial statement that details a company's sales and earnings. When evaluating an income statement, the savvy investor usually wishes to maximize his or her immediate or long-term ability to make a profit on a stock. Thus, conventional wisdom holds that investors should buy when a stock's price to earnings ratios are low and sell when these ratios are high. In other words, if a stock stands to earn a great deal and has a strong track record of doing so, yet is priced relatively cheaply in relation to those future earnings, it is wise for an investor to buy that stock. The reverse is true as well, though -- if the stock is priced relatively high, but shows a poor record of earning dividends for shareholders in the long-term, in ratio to the asking price, the investor should not purchase the stock.

For management, the most important information is about sales and expenses at the company, over which…… [Read More]

View Full Essay

Accounting for Partnerships Businesses Can Be Classified

Words: 2169 Length: 7 Pages Document Type: Essay Paper #: 72324982

Accounting for Partnerships

Businesses can be classified into various forms of ownership. In this text, I concern myself with partnerships. In so doing, I will discuss partnerships and the various advantages as well as disadvantages associated with this form of business ownership. Further, I will also highlight the Financial Accounting Standards (FAS) governing accounting for this form of business ownership from creation and operation to liquidation. Partnerships' tax consequences will also be discussed.

Partnerships: Advantages and Disadvantages

Just like any form of business ownership, partnerships also do have several advantages and disadvantages. A partnership according to Needles, Needles and Powers (2010) is "an association of two or more persons to carry on as co-owners of a business for profit." In that regard, a partnership is formed when two or more people come together with an aim of initiating a business activity. Individuals may be motivated to start a partnership form of business by a number of factors. These factors could include but they are not limited to the possession of complementary talents as well as skills.

One of the main advantages of a partnership as a form of business organization is access to more capital. Indeed, as Eisen (2000) points…… [Read More]


Clifford, D.C., Warner, R.E. & Warner, R. (2008). Form a Partnership: The Complete Legal Guide (8th ed.). Berkeley: Nolo.

Eisen, P. (2000). Accounting (4th ed.). Hauppauge, New York: Barron's Educational Series.

Needles, B.E. & Powers, M. (2010). Financial Accounting (11th ed.). Mason, OH: Cengage Learning.

Pride, W.M., Hughes, R.J. & Kapoor, J.R. (2011). Business (11th ed.). Mason, OH: Cengage Learning.
View Full Essay

Accounting and Finance Henkel AG Is a

Words: 2826 Length: 10 Pages Document Type: Essay Paper #: 72406272

Accounting and Finance

Henkel AG is a multinational company focusing its brand and technologies in three business areas that include Beauty Care, Laundry & Home Care and Adhesive Technologies. Established in 1976, the company holds its global market positions in both the consumer and industrial products with well-known brands that include Lactate, Persil, and Schwarzkopf. Henkel's headquarter is in Dusseldorf in German and the company has over 47,000 employees globally. Typically, the company is considered among the most "internationally aligned German-based companies in the global marketplace." (Henkel 2012).

Objective of this paper is to use various financial models to carry out financial analysis and valuation of financial Henkel AG.

Valuation Model

One of the methods to carry out the valuation of a company is to use enterprises discounted cash flow (DCF). The DCF could be carried out using WACC (weighted average cost of capital) that represents the opportunity costs that investors will face when they decides to invest their funds in the capital market. To determine WACC, the three components are used which include after-tax cost of debt, the company target capital structure and the cost of equity. However, none of the variables is observable, various models, approximations and assumptions…… [Read More]

View Full Essay

Accounting for Decision Making Roland Anderson Is

Words: 522 Length: 2 Pages Document Type: Essay Paper #: 64168311

Accounting for Decision Making

Roland Anderson is the manager of the Ekland Division of Ystad Industries and has some decisions to make based on accounting data. Anderson is also being considered for the CEO position of the company which makes his dilemma even greater. He is unhappy with the profitability for the first quarter and is considering maxing out the capacity of the operation in the second quarter. It was found that Anderson actually performed fairly well based on the assumption that his actual costs were below the variable costs provided in the case using the contribution method. Doubling the production plan would be an unwise move given the fact that the sales forecast is only for twenty five thousand units. Thus if he produces fifty thousand units he would have greater inventory and it is likely that he would have to cease operations and let some workers take a vacation or something until the inventory levels are significantly reduced. Given the fact that Anderson is even considering this strategy implies that he is entirely unfit to be the future CEO.

Contribution Margin Comparison

The following Income Statement was prepared using the contribution margin. Since the variable rate was fifty…… [Read More]

View Full Essay

Accounting A I Using Direct Labour Hours

Words: 1350 Length: 5 Pages Document Type: Essay Paper #: 101465


a) i) Using direct labour hours as the cost driver for the overhead costs, the following table presents the net profit calculation for each line of motorcycle:

Vroom plc

Total Profit


Direct labour









less DL

less Materials

Gross Profit

Less Overhead

Net Profit

Activity-based costing is designed to allocate overhead costs based on the resources that each activity consumes (The Economist, 2009). The key to activity-based costing is that the cost drivers are assigned differently, and in a manner that should better reflect actual resource usage than a cost driver that may be picked almost at random (Investopedia, 2013). Using ABC, the following are the net profit calculations for the three different products at Vroom.

Vroom plc

Total Profit
















Purchase orders





less DL




less Materials




less Del




less SU




less PO




Net Profit




b) Activity-based costing is designed to give a more accurate representation of the costs for each product. The above charts…… [Read More]


The Economist. (2009). Activity-based costing. The Economist. Retrieved November 12, 2013 from 

Investopedia. (2013). Activity-based costing. Investopedia. Retrieved November 12, 2013 from
View Full Essay

Accounting and Finance Comparison of Selected Financial

Words: 1024 Length: 3 Pages Document Type: Essay Paper #: 80991135

Accounting and Finance

Comparison of Selected Financial Performance Data for WalMart and Target

WalMart and Target compete in very similar markets, competing in the supermarket segment of the retail industry, with some diversified interests. To assess the performance of these two firms, their results for the financial years ending January 2012 and 2013 may be examined and compared. This paper will look at the performance in terms of revenues, cost of goods, accounts receivable and payable and inventory management.


The performance of a firm often starts with an assessment of the revenue that is generated and the way in which this changes over time. The revenues for both WalMart and Target are shown in table 1.

Table 1; Revenue for WalMart and Target 2012-2013







Revenues ($ millions)





Change in revenues from previous year

The levels of revenues demonstrate that WalMart is the larger firm; the revenues are more than 6 times the size of Target. However, in both cases the firms are showing a growth in their market share. In the financial year which ended the January 2012 saw WalMart make the larger proportional gain, 5.95% compared to 3.67%.…… [Read More]


Target, (2013), 10k, retrieved 

WalMart, (2013), 10k, retrieved
View Full Essay

Accounting Kaplan and Anderson 2005 Notes That

Words: 932 Length: 3 Pages Document Type: Essay Paper #: 37955260


Kaplan and Anderson (2005) notes that activity-based costing (ABC) systems are not as effective in practice as they are on paper. Among the grievances that Kaplan notes with respect to ABC, the system is not very scalable, losing power as the company gets larger. The textbook version is usually a very simple company with a handful of activities, but in the real world companies can have hundreds of products, thousands of activities and tens of thousands of customers. This presents a challenge, because activity-based costing requires a substantial amount of information in order to be effective. Past a certain scale of organization, activity-based costing does not deliver a good return on investment because of the costs associated with gathering and analyzing this information. Kaplan wrote this in 2005, mind you, when perhaps information gathering and processing capabilities were somewhat worse than they are today. Certainly doing ABC manually is likely to fail to yield a healthy return on investment. Similarly, Kaplan also notes that it is complex and difficult to implement ABC. Even if today's processing capability was brought to ABC, it would be a challenge to set up the systems to gather the needed information and again there…… [Read More]


Gilbert, S. (2007). Adding time to activity-based costing. Working Knowledge. Retrieved March 15, 2014 from

Kaplan, R. & Anderson, S. (2005). Rethinking activity-based costing. Working Knowledge. Retrieved March 15, 2014 from
View Full Essay

Costs at Netflix

Words: 811 Length: 2 Pages Document Type: Essay Paper #: 69424861


Netflix Costs

Netflix is a well-known media company. The firm makes media content available to customers based on a monthly subscription fee. The main area of the business is the internet television network, with the company streaming media content such as television programs and films, to more than 44 million subscribers across more than 40 counties (Netflix, 2013). In addition the firm also has a DVD rental segment, sending out DVD's by post. This model of operation places the firm in the service sector; the service offered being the media distribution. The firm is divided into three segments; the postal rental business in the U.S., the domestic internet streaming business in the U.S. And the international streaming business.

The firm has an inventory; there is a physical inventory of the DVD that is sent out for the postal rental service. The digital content library is not a physical inventory, but they make up the services that are accessed by the customers and are classified mainly as a current asset.


In order to operate ad offer the services to the customers, Netflix will incur expenses. These may be categorized as variable costs and fixed costs. Variable costs are those…… [Read More]


Netflix, (2013), 10-k, accessed 18th May 2014 at

Walther, L, M, (2012), Principles of Accounting, CreateSpace Independent Publishing Platform
View Full Essay

Accounting Fraud There Are Numerous

Words: 881 Length: 3 Pages Document Type: Essay Paper #: 2321933

But these bills were not received and paid for several months since these costs were incurred, while accounting principles required that the company made such payment estimations that were supposed to be matched by the revenues in the income statements. Therefore, the CFO told its subordinates to release accruals that were considered too high.

The CFOs of some of the units of WorldCom refused to book such entries. Regardless of the CFOs repeated pressure, they refused to book these illegal entries. However, Sullivan managed to book his entries with the help of other managers that obtained the account number and determined subordinates to make the entry. In addition to this, some of the accounting department's employees made accrual releases without informing the senior managers.

This situation was established as a regular practice at WorldCom. The company's accountants also took part in this situation. This is because they accepted to release accruals that were not in accordance with the real situation. Instead, the accountants should have reported this to their superiors. They also could have refused to book such entries. However, even of the accountants would have refused the order of the CFO regarding the release of accruals, Sullivan would have…… [Read More]

Reference list:

1. Kaplan, R. & Kiron, D. (2008). Accounting Fraud at WorldCom. Harvard Business School. Retrieved January 30, 2011.
View Full Essay

Costing & Pricing Costing Decisions

Words: 1535 Length: 5 Pages Document Type: Essay Paper #: 97119816

Joint costing systems should bear in mind the legal constraints on the use of such systems, and should provide accurate information to managers in order to be most useful in the managerial accounting context.

Firms need to remain competitive, which indicates that the market will set prices to some degree. This implies that firms can make better decisions with respect to what projects/products they wish to pursue by understanding the cost structure of the product. If the product is not viable at the cost at which it can be produced, then the firm can improve profitability by dumping the product.… [Read More]

Works Cited:

Banham, R. (2000). Off target? CFO Magazine. Retrieved April 5, 2011 from

Frederick, S. (2011).

The persuasive power of opportunity costs. Harvard Business Review. Retrieved April 5, 2011 from

Katz, D. (2002). Activity-based costing (ABC). CFO Magazine. Retrieved April 5, 2011 from
View Full Essay

Accounting Two

Words: 1060 Length: 4 Pages Document Type: Essay Paper #: 98871348

Accounting II

ABC Overall risk profile

The ABC Company may face series of risks based on the current industry and economic issues. First, the company is operating in a competitive market environment making the company to face a fierce competition from other companies producing similar products. Thus, the ABC Company may likely to lose some of its customer to competitors if the price per product is too high.

Moreover, the current recession may affect the purchasing power of customer, which may affect the company annual revenue. Moreover, inflation is likely to increase the cost of production. Another risk issue is that the company should satisfy its shareholders by declaring high dividends and failure to satisfy the shareholder may make some shareholders to disinvest their fund from the company, which may make the company to lose the public image. (Daniel, Njikizana, . & Chamboko, 2011).

Current ABC cash flow using Direct Method

ABC Statement of Cash Flow using Direct Method


Payments Received from Customers


Payment to supplier and vendors


Payments to Vendors and Suppliers

Cash generated from operations


Interest paid


Income tax paid


Dividends paid


Net Cash Provided (Used) by…… [Read More]


Bragg, S.M. (2011). The Controller's Function: The Work of the Managerial Accountant, (Fourth Edition) UK. Wiley .

Daniel, B.M. Njikizana, C.T. & Chamboko, R. (2011). Interpretation and Application of International Financial Reporting Standards.UK. Wiley.
View Full Essay

Accounting Congo Limited Budget in

Words: 1426 Length: 5 Pages Document Type: Essay Paper #: 22027583

However, with budgeting, management can easily see how much money is available for projects and what the most pressing issues of the company are. Without the budget, the company is doomed as it is unable to account for its cash flow and revenue streams (Sullivan, 2003).

Also, various financial models can be used to aid management. These tools can include sensitivity analysis and regression analysis. Sensitivity analysis in particular is a very crucial component within the overall business strategy of a firm. Sensitivity analysis helps properly forecast adverse scenarios under various market stressors. It also allows management to determine what variables have the greatest impact on the strategic outcome. Management must determine where capital should be deployed in the underlying business. Through budgeting management can determine to what extent capital should be deployed in a particular business. Budgeting is the foundation for proper financial planning. Through proper budgeting, financial planning can become more effective in the context of the overall business strategy. Budgeting overall should be a value added activity (Mittra, 2007). By linking budgeting to the overall strategic plan, management has a better grasp of the aspects of the business. This is particularly true is management extensively uses historical…… [Read More]


1) Cliche, P. (2012). "Budget," in L. Cote and J.-F. Savard (eds.), Encyclopedic Dictionary of Public Administration, [online], 

2) Sid Mittra, Anandi P. Sahu, Robert a Crane. "Practicing Financial Planning for Professionals" (Practitioners' Edition), 10th Edition. (Rochester Hills Publishing, Inc., 2007) sec. 1-3.

3) Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 312- 375. ISBN 0-13-063085-3.

4) Varshney, R.L.; K.L. Maheshwari (2010). Manegerial Economics. 23 Daryaganj, New Delhi 110002: Sultan Chand & Sons. p. 804-881. ISBN 978-81-8054-784-3.
View Full Essay

Accounting Function for a Chosen

Words: 6160 Length: 23 Pages Document Type: Essay Paper #: 22760906

"Management believes that the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates actual results could differ from the original estimates, requiring adjustments to these balances in future periods."

Based on the data retrieved and the projections made, the accounting division will proceed to the development of the consolidated statements for all of GM subsidies and the overall group. There are 24 consolidated statements, as follows: Discounted Operations; Asset Impairment; Investment in Nonconsolidated Affiliates; Marketable Securities; Variable Interest Entities; Finance Receivables and Securitization; Inventories; Equipment on Operating Leases; Income Taxes; Property - Net; Goodwill and Intangible Assets; Other Assets; Accrued Expenses, Other Liabilities and Deferred Income Taxes; Long-Term Debt and Loans Payable; Pensions and Other Postretirement Benefits; Commitments and Contingent Matters, Stockholders' Equity; Earnings per Share Attributable to Common Stocks; Derivative Financial Instruments and Risk Management; Fair Value of Financial Instruments; Stock Incentive Plans; Other Income; Segment Reporting and Subsequent Events.

Chapter II: Financial Accounting Analysis

General Motors is undergoing a significant crisis in the present, also there are significant elements to show that this is not necessarily a financial crisis, but rather an operational one, mainly related to…… [Read More]


1. 2007 General Motors Annual Report. Page 9. On the Internet at retrieved on February 15, 2009

2. General Motors Mission Statement, 2009, on the internet at Ast retrieved on February 16, 2009

3. Supplier Diversity, Website of General Motors, 2009, on the internet at retrieved on February 16, 2009

4. Management's Discussion and Analysis, Website of General Motors, 2009, on the internet at retrieved on February 16, 2009
View Full Essay

Accounting the Impact of Distance Learning in

Words: 1577 Length: 5 Pages Document Type: Essay Paper #: 45566862


The Impact of Distance Learning in Accounting Higher Education

This paper is intended as an Introduction to a research study in to the impact of distance learning on the teaching of accounting in higher education. The context of the research will first be introduced i.e., the background to the research. The research to be undertaken will then be introduced, as will the specific questions and sub-questions to be addressed. The significance of this study will then be analyzed, and the people who are expected to benefit from this research will also be outlined. The research methodology and the practical design of this research methodology will be discussed, and the primary and secondary sources to be used will be introduced, and a list of preliminary resources will be given in the… [Read More]


Anne Nicholls, Flexible study opens doors., Independent on Sunday, 01-14-1996, pp 12.

Serwatka, Judy A, Improving student performance in distance learning courses., THE Journal (Technological Horizons In Education), 04-01-2002, pp 46.

Mariola, Eleni; Manley, John, Teaching finance concepts in a distance learning environment -- a personal note., Journal of Education for Business, 01-01-2002, pp 177
View Full Essay

Accounting Information and Insights Into

Words: 572 Length: 2 Pages Document Type: Essay Paper #: 51336267

The second question is the cost per unit to produce a given product or deliver specific service. Just as the total cost of revenues for a business, this figure will also provide a business owner with insights into how their business is operating, from the supply chain through pricing and distribution of gross margin assumptions (Hall, 2010). The cost per unit to produce is also a good measure of how well the efficiency of a given company is running at. Often a business owner will evaluate these from the standpoint over the long-term, looking for trends in hwo their business is operating at an efficiency level that makes the entire company profitable. For services business, the cost per service event or services deliver (as a plumber making a house call) needs to have a minimum charge level as costs are allocated across all forecasted calls in a given month. This is critically important for a business owner to see over the long-term in order to manage both costs and processes that contribute to their delivering a product or service.

While accounting and financial systems can deliver significant value across many questions, these two are the most critical as they will…… [Read More]


Hall, M. (2010). Accounting information and managerial work. Accounting, Organizations and Society, 35(3), 301.

Jansen, E.P. (2011). The effect of leadership style on the information receivers reaction to management accounting change. Management Accounting Research, 22(2), 105.
View Full Essay

Accounting Information a Senior Executive in a

Words: 580 Length: 2 Pages Document Type: Essay Paper #: 7128783

Accounting Information

A senior executive in a Fortune 500 firm along with their colleagues on the company's management team are dependent on accurate, timely, and pertinent financial information regarding the health of the organization. Accounting information has aptly been described as "the language of business, which is used in the management, planning, control, and decision- making processes integral to achieving organizational objectives" (Marshall, D. & McManus, W. 1996). In this regard accounting information falls into distinct categories: financial and managerial accounting; yet with considerable overlap in their utilization by management. Explication of these accounting areas provides considerable insight into their utility in providing effective quantitative data for analysis.

Financial and Managerial Accounting

Financial accounting concerns itself with the "preparation and reporting of financial statements for an entity" (Marshall, D. & McManus, W. 1996); while managerial accounting "is concerned with providing information to managers- that is, to those who are inside an organization and who direct and control its operations" (Geense, M.N.D.). The bifurcation of financial and managerial accounting is mostly concerned with their respective users; the former "is aimed at providing information to parties outside the organization ( N.D.), the latter is "aimed at helping managers within the organization" (…… [Read More]

Likewise, managerial accounting also utilizes financial data to reach conclusions as to how the company is operating and what if any corrections are necessary to enhance profitability. In this vein managerial accounting concerns itself with the analysis of costs, budgeting, performance, and capital expenditures. Managerial accounting information is highly detailed and provides a platform from which to judge the company's revenue creation and its cost controls. As examples, an executive management team might take considerable time analyzing activity based-costing; a "system identifying the activity that causes the incurrence of a cost" (Marshall, D. & McManus, W. 1996). This data could lead to a discussion on the company's operating leverage based on their orientation of fixed or variable costs. While both financial and managerial accounting provides detailed data concerning company performance, managerial accounting has a distinctive narrowness to its scope of focus.

Communication of Information

With volumes of financial information generated by a Fortune 500 firm's accounting department, the question becomes how
View Full Essay

Accounting a Static Budget Is Defined as

Words: 1158 Length: 4 Pages Document Type: Essay Paper #: 3774204


A static budget is defined as a budget that is "planned ahead of time based on the owner's best guess about future actual activity." This type of budget is therefore put together for the upcoming time period, and is often based on the data from past time periods, plus or minus different adjustments that management thinks will be necessary. In contrast, a flexible budget is one where the business management can make changes in the midst of an accounting period. Flexible budgeting allows for management to make better decisions on the fly, because the information used in those decisions is kept more up-to-date. Static budgeting relies only on the ability of management to analyze the numbers after the period in order to determine the magnitude and direction of variance, along with the causes of variance. For a flexible budget, management can identify issues with the budget right away, and take steps to deal with them. The new strategy and tactics can then be reflected the budget.

For the charter school, the budget presented is basically three static budgets. The budgets are set depending on the number of students, which is unknown. However, this budget does not reflect capacity to…… [Read More]

Works Cited:

Mueller, D. (2012). Static budget vs. flexible budget. eHow. Retrieved September 12, 2012 from

Bigelow, L. (2012). Static vs. flexible budgets for new businesses. Houston Chronicle. Retrieved September 12, 2012 from
View Full Essay

Accounting - FedEx and UPS

Words: 3140 Length: 9 Pages Document Type: Essay Paper #: 69265327

Another factor that should be taken into consideration is that of overall strategy. Financial statements are snapshots, and sometimes it can be difficult to discern from looking at a small sample of them the firm's overall direction. Key strategic decisions can have a significant impact on the financial statements for a limited period of time. For example, during the period studied FedEx was having trouble absorbing Kinko's which it had purchased. These difficulties are not fully reflected on the income statements for 2005 and 2006. Instead, they appear as an unusual item (a writedown) in 2008. Likewise, UPS took a $6.1 billion writedown in 2007, which made the financial figures for that year look terrible. There is always strategic context in financial statements. That context is not always readily apparent, but it should be taken into consideration when analyzing the financial statements.

The potential impact of mergers and acquisitions should also be taken into consideration. A major acquisition can have a significant impact on a firm's financial statements for a year or more. Those impacts are not generally separated out from the rest of the operations. As a general rule, an evaluation of financials should consider metrics more often used…… [Read More]

View Full Essay

Accounting Operating Income it Typically Defined to

Words: 679 Length: 2 Pages Document Type: Essay Paper #: 28946095


Operating income it typically defined to include all operating expenses other than depreciation and taxes (Investopedia, 2011). Because the airplanes are leased, there is no depreciation for West Coast Airlines to take into consideration anyway. The operating income is as follows:


AVG Passengers

Variable fuel


Food & Beverage


Fixed Lease

Ground Services

Flight Crew

Operating Income

The company right now is losing $31,012.50 on every one-way flight to Fiji.

If the company lowers the cost of the flight in order to generate an increase in volume, the operating income figures will look as follows:


Avg Passengers

Variable fuel



Food & Beverage



Fixed Lease


Ground Services

Flight Crew

Operating Income


By these figures, Fiji Air loses $28,924 per one-way flight with the lower ticket price and the higher average number of passengers. The bigger issue is that even under this scenario, the company loses an incredible amount of money per flight. It would appear that the bigger problem is the lease per flight. The lease is a fixed cost, but right now the company is treating it like a variable cost. What the company needs to do is realize that…… [Read More]


Investopedia. (2011). Operating income. Investopedia. Retrieved February 8, 2012 from 

No author. (2012). Break-even point. Accounting Retrieved February 8, 2012 from
View Full Essay

Accounting Choosing the Right Structure

Words: 1626 Length: 4 Pages Document Type: Essay Paper #: 15995914

, 2010). Where there is the sale of shares, there is also a great potential that the existing owners will have little control over who the shares are subsequently sold to, especially in a quoted company. The firm will also be subject to the Sarbanes-Oxley Act (SOX), which was also known as the "Company Accounting Reform and Investor Protection Act," in the Senate (Libby et al., 2010).


Decision for the Business

As the business is a new idea, and will initially only involve a single person, the idea of a partnership may be eliminated. This leaves sole proprietorship and corporation. If there is to be only one owner the S-corporation may be used, as this may accommodate a single shareholder. This structure may be attractive as the business will be a separate entity, especially as the owner will not carry any personal liabilities for the business debts. However this is costly to set up and maintain: a particular issue when a business is just starting up. It may also be argued that a new corporation without a credit history may be unattractive to creditors and lenders, so the protection afforded by the corporation may be undermined if the potential…… [Read More]


Clarkson, Kenneth W; Miller, Roger LeRoy; Cross, Frank B, (2010), Business Law: Text and Cases - Legal, Ethical, Global, and Corporate Environment, Cenage Learning

Libby, Robert; Libby, Patricia; Short, Daniel, (2010), Financial Accounting, McGraw-Hill

Weygandt, J, J; Kieso, DE; Kimmel, PD, (2011), Financial Accounting, Wiley

The business idea has been set up in a manner which can be easily changed by the student, without impacting on the rest of the paper.